New capital targets late-stage growth for fintech, AI, and SaaS companies as funding bottlenecks threaten UK innovation pipeline.
UK venture capital firm Volution has launched a new $100 million fund to tackle one of the biggest challenges in Britain’s startup ecosystem: the scale-up gap. With early-stage funding still relatively healthy, many promising tech companies are struggling to secure the capital needed to grow beyond Series A and expand internationally.
Backed by Japan’s SBI Investment Co. as a co-general partner, the fund is Volution’s second and is laser-focused on supporting high-growth UK businesses in fintech, AI, and SaaS that are ready to break into global markets but face limited access to later-stage funding.
The timing is critical. According to recent data, Series A funding in the UK fell 44% in 2024, and the conversion rate from Series A to B has halved over the past five years. Without follow-on capital, many startups either exit too early, stall, or quietly disappear.
“The UK has a huge challenge,” said James Codling, Managing Partner at Volution. “We’ve over-prioritized early-stage capital through tax-incentivised schemes, but that money dries up post-Series A. What we need now is firepower at the growth stage—when businesses are ready to scale globally and deliver real returns.”
Codling emphasized that Volution isn’t looking to back ideas or prototypes. “These are revenue-generating companies with at least £5 million in annual recurring revenue, strong product-market fit, and clear go-to-market strategies. They align with the Government’s Industrial Strategy and are ready for the next leap.”
The fund has already made two investments—one in fintech and one in AI—and is actively seeking additional high-growth candidates.
SBI Investment’s involvement is part of a broader effort to deepen economic ties between Japan and the UK. “The UK remains a global hub for fintech and AI,” said Tomoyuki Nii, Director and Executive Officer for Overseas Investment at SBI. “Our commitment to Volution supports a new wave of innovation-led growth across both markets.”
Volution, known for backing standout UK tech companies like Zopa Bank, aims to bridge the funding gap between early-stage VCs and private equity. Alongside capital, the firm offers hands-on expertise in scaling operations and navigating international expansion.
For Britain’s next generation of tech leaders, Volution’s fund could mean the difference between fading out—or breaking through.
